Fix the Money. Fix the World.

Lucas Bazemore

"No force on earth can stop an idea whose time has come" - Victor Hugo.


In the 1970s, Stanford psychologist Walter Mischel conducted a series of psychological studies now known as the "Marshmallow Experiment." The essence of the study was quite simple: place a child in a room with a single marshmallow, then offer them a deal. They could either eat the one marshmallow immediately or wait for fifteen minutes without succumbing to the allure of the sweet treat, and they'd be rewarded with two marshmallows.

Now, the fascinating part wasn't the choice they made but the long-term implications of that decision. The kids who demonstrated the self-control to delay gratification, to sacrifice the present for a sweeter future, were found to fare better in life. They showed higher levels of competency, received better SAT scores, maintained healthier body weights, and achieved higher levels of education. In short, the ability to resist the immediate lure for a more prosperous future had real-world implications.

Now, let's draw a parallel to our economic systems. Much like that room full of children, we presently live in a world dominated by "easy money," where immediate gratification is the norm. Capital is cheap, debt is plentiful, and the prevailing wisdom is to "consume now, pay later."

"Between 2019 and 2021, the number of BNPL ( Buy Now, Pay Later ) loans originated in the U.S. by the top five lenders grew by 970 percent. Not only that, but the dollar volume of BNPL loans grew by over 1,000 during that same period, going from $2 billion to $24.2 billion."

With money rapidly losing its value to inflation, we're all incentivized to take the marshmallow now. We're all children forced to take the first marshmallow in Mischel's experiment, and our economy reflects that. We're living in an age of economic instant gratification, where saving is a fool's errand.

But there was a time when money - hard money - was different. When gold and silver were the standard, their limited supply encouraged saving, promoted patience. In a hard money system, the marshmallow later was worth the wait. This is an economic environment that incentivizes the delayed gratification, where the future's potential is worth more than the immediate, fleeting satisfaction.

The crux of this tale is simple yet profound: the nature of money - whether it's hard or easy - shapes our actions, our decisions, and by extension, our societies at large. It's a truth as old as civilization itself, often forgotten, but as we delve deeper into this discussion, we'll explore the implications of this truth, trace the trajectories of societies built on hard and easy money, and glimpse into a future shaped by an entirely new kind of currency - Bitcoin.

A Brief History of Money.

Hard Money and its Impact on Societies

Hard money, the venerable patriarch in the currency clan, is traditionally defined as a medium of exchange that is intrinsically valuable, scarce, and not easily debased. What makes it "hard money", is that it's hard to create.

However, money can be anything from shells to beads, from metal coins to paper notes, and in its various forms, money has been the silent protagonist in our civilization's story. In their shiny, tangible grandeur, gold and silver were the quintessential exemplars of hard money. Their allure, however, wasn't simply their physical appeal or malleability. Instead, it was their scarcity and indestructibility, which established them as reliable stores of value over extended periods.

Ancient civilizations such as Mesopotamia, Egypt, and early Greece used grains, livestock, and precious metals as a medium of exchange and store of value. For most of human history "money" has been hard to create.

The European powers, with their fleets and ambitions, were mesmerized by the prospect of gold. It was more than an infatuation; it was a strategic pursuit underpinning their overseas ventures. Gold was more than a precious metal; it represented power, influence, a route to economic ascendancy.

But the benefits of hard money extended beyond geopolitical power plays. For the common man, hard money offered a degree of certainty in an uncertain world. For instance, during the Roman Empire, the denarius, a silver coin, was used for everyday transactions, from buying food at the market to paying soldiers in the military1. That is before it was bebased, but we'll get there.

When we look at the Roman Empire, particularly during the height of its economic prosperity in the 1st and 2nd centuries AD, gold coins were widely circulated and played a crucial role in facilitating trade and economic transactions. The use of gold as a medium of exchange had several advantages during this time:

  • Standardized Currency: The Roman Empire adopted a standardized gold coin called the aureus, which had a fixed weight and purity. This uniformity and standardization of the currency made transactions easier, reduced transaction costs, and provided a reliable medium of exchange throughout the empire.

  • Stability and Trust: The gold coins of the Roman Empire were widely recognized and accepted across its vast territories. This stability and acceptance fostered trust in the currency, enabling economic interactions and trade between different regions and peoples under Roman rule.

  • Store of Value: Gold coins were valued for their inherent scarcity and durability, making them an effective store of value. People could confidently hold and save gold coins, knowing that their value would likely be preserved over time. This encouraged saving and capital accumulation, which contributed to economic growth and investment.

  • International Trade: The Roman Empire's use of gold coins facilitated international trade and economic relations. Gold was a widely recognized and desirable medium of exchange beyond the borders of the empire, enabling trade with neighboring regions and distant trading partners.

The hard money system provided predictability and stability. With their intrinsic value, coins made of precious metals maintained their worth, thereby protecting the savings of individuals and preserving purchasing power even in turbulent times.

We also experienced a very similar situation in what's called the Classical Gold Standard that emerged in the 19th and early 20th century where all major countries backed their currencies with gold deposits.

Since the currency was tied to gold, excessive money creation and budget deficits could deplete gold reserves, leading to a loss of confidence in the currency. Governments were incentivized to maintain sound economic policies and manage their finances prudently.3

However, hard money also presented its challenges. Its physical nature posed issues of storage and transport, while its scarcity could lead to deflationary pressures. More importantly, the very attribute that made hard money desirable - its limited supply - also resulted in power imbalances, with those possessing gold and silver exerting disproportionate influence.

While hard money is hard to create, provides a store of value, and supports economic stability, it's not without its shortcomings. These shortcomings have led to the adoption of other forms of currency, predominently banknotes, which are simply paper IOUs for hard money. Banknotes are easy to exchange, but easy to manipulate and its too easy to create more notes than hard money can back. Which ultimately means money moves from from banknotes to fiat currency. Ray Dalio has written about this in extensive depth.

The Shift to Fiat Currency and the Emergence of Easy Money

As we turn the pages of economic history, we find ourselves moved into a monetary era. An era where hard money, with its inherent scarcity and tangible allure, cedes center stage to a new protagonist: Fiat money.

Unlike hard money, fiat money is not backed by a physical commodity. Instead, it draws its value from governmental decree, an agreement among the users that it is a medium of exchange, a unit of account, and a store of value ( though this is not entirely true ). This is the realm of paper bills and digital numbers, the realm of "easy money."

In its own way, easy money is a paradox. It offers ease and flexibility, unhindered by the physical constraints of hard money. With a stroke of the printing press, governments can create money to stimulate economies, fund projects, or tackle debts. However, with this ease comes volatility and the persistent specter of inflation. The promise of instant wealth can easily morph into a nightmare of eroding savings and depreciating currency.

The shift to fiat currency and the ensuing era of easy money have profound impacts on economies and societies. Instant wealth, economic stimulus, seemingly infinite growth - these are the siren songs of easy money. Yet, this flexibility can engender short-term thinking, overconsumption, and, over time, destabilize the very economies it was designed to support. The abundance of money can lead to its own value's depreciation, manifesting in inflation or hyperinflation, as seen in Zimbabwe in the late 2000s4.

But perhaps no historical example illustrates the transition to easy money and its implications more starkly than the United States' breaking from the gold standard in 19715. In an attempt to curb foreign gold demands and safeguard the U.S. gold reserves, President Richard Nixon severed the link between the U.S. dollar and gold, essentially shifting the dollar - and by extension, the global economy - to a fiat system.

Since this decisive break, the global economy has been on a roller coaster ride. On the one hand, we've seen remarkable economic growth, innovation, and globalization. On the other, we've witnessed ballooning national debts, increasingly frequent economic bubbles, and widening income inequality. The global debt has surged to dizzying heights, reaching over $300 trillion in 20236, a testament to the unrestrained monetary expansion that fiat systems enable.

The U.S. itself has been grappling with these dual realities. While the economy has grown significantly since 1971, this growth has been accompanied by a significant rise in income inequality and a steady erosion of the middle class7. The easy money environment has led to a wealth gap that threatens the very fabric of society, a stark illustration of how the nature of money can fundamentally shape a nation's socio-economic landscape.

When the money no longer serves as a store of value, everything else becomes a store of value and people will put their money where they think it is safest. In the USA, that's into homes. In Argentina where the inflation rate is over 100% annually as of 2023, that's cars.

For the most staggering display of changes that occur because of the access of easy money, look at, the year Nixon took the United States off the gold standard.

The Emergence of Bitcoin

It was the year 2008. The world was in the grips of a financial crisis, trust in traditional financial institutions was waning, and out of this tumultuous landscape emerged a revolution - the birth of Bitcoin and the dawn of cryptocurrency.

Bitcoin, a novel, decentralized, peer to peer, digital currency, was conceptualized in a white paper by an individual or group operating under the pseudonym Satoshi Nakamoto8. While several attempts to create digital currencies had been made prior to Bitcoin, none had successfully solved all the problems with digital currency, the double-spending problem - the risk of a digital currency being spent more than once or the two general's problem - the risk of transactions being lost. Nakamoto's invention was the first to overcome this challenge, paving the way for a new class of assets: cryptocurrencies.

In many ways, Bitcoin draws upon the ethos of both hard and easy money. Like hard money, Bitcoin is scarce, with a total supply capped at 21 million coins. It cannot be debased or inflated at will, echoing the principles of gold. Yet, it is not physical and can be easily transferred across the globe in a matter of minutes, reflecting the flexibility and convenience of easy money. Bitcoin, in a sense, is a fusion of the old and the new, marrying the stability of hard money with the fluidity of easy money.

How Bitcoin Works

At the heart of Bitcoin's innovation is blockchain technology, a decentralized ledger system that records transactions across many computers so that the involved records cannot be altered retroactively. This decentralization means that no single entity has control over the entire network. This quality renders Bitcoin resistant to censorship and immune to manipulation by any party, be it governments, financial institutions, or individuals.

This means that the actions by the Canadian Prime Minister Justin Trudeau to freeze the bank accounts of protesters would be impossible.

The lifeblood of Bitcoin's blockchain is the mechanism known as 'proof-of-work.' This protocol, fundamental to the functioning and security of the network, requires miners to solve complex mathematical problems to validate transactions and add new blocks to the blockchain. This process is resource-intensive, effectively tying energy production to the creation and stability of Bitcoin. The result is a system where the creation of new Bitcoins is not only transparent and predictable but also dependent on the real-world input of energy, imbuing Bitcoin with a form of 'physicality.'

And yet, despite this physicality, Bitcoin is digital, enabling the frictionless transfer of value across borders. No longer does one need to transport hefty bars of gold or stacks of banknotes to move wealth across continents. With Bitcoin, significant sums can be sent anywhere in the world virtually instantly, solving the long-standing problem of money transportation.

Additionally, because Bitcoin is meant to be a global currency, it creates an international standard by which everyone can settle transactions and sleep safely knowing that their money will be accepted anywhere in the world.

Bitcoin is thus a novel fusion of hard and easy money characteristics, combining scarcity, decentralization, energy-dependent creation, and easy transferability.

A Bitcoin Future: How we fix the world.

The current global adoption of Bitcoin is speculated to be between 5% - 10% in 2023, so the idea of Bitcoin as the global reserve currency may seem ridiculous, but let's suspend disbelief for a moment.

Let us pose for a minute that the people of the world decide they want to use Bitcion for global transactions and that Bitcoin becomes the default global reserve currency.

Because of the underlying technology and the core incentive structure of Bitcoin, in the long run, and for the purposes of this speculation, we'll assume at least 2 generations or approxiametaly 40 years, the following will almost be inevitable effects from the adoption of Bitcoin:

Corruption and Organized Crime will be Eradicated

The immutable and transparent nature of Bitcoin's blockchain makes every transaction traceable, making it harder for corruption and organized crime to hide in the shadows of cash-based opacity. The result? A brighter world, where each Bitcoin transaction leaves a trail of truth in its wake, holding individuals and institutions accountable and potentially reducing corruption and crime.

Funding Wars becomes virtually Impossible

The idea of simply conjuring wealth out of thin air to fund wars becomes untenable. The economic friction of war becomes insurmountable unless victory is all but assured because the cost of capital will be all too high. This does not mean wars are impossible, but the cost of war will be so expensive that funding wars will be untenable.

International Remittances will flow Smoothly

For countless individuals worldwide, sending money home to their families is a process fraught with hurdles, inefficiencies, and exorbitant fees. Enter Bitcoin. With its ability to transcend borders with ease and speed, Bitcoin holds the promise of making remittances a smoother, more affordable process. This could fundamentally change the lives of millions, providing financial relief to families across the globe.

Financial Freedom will be Attaible for All

With Bitcoin, individuals gain complete control over their financial assets. A case in point is the Canadian Truckers' Incident, where the government froze the assets of individuals involved in a protest. With Bitcoin, such measures become impossible, offering a new layer of protection for one's wealth and enhancing financial freedom.

Local Communities will become Self Sufficient

Bitcoin's deflationary nature boosts purchasing power over time, positioning it as a true store of value and providing a compelling argument against rampant consumerism. Instead of living paycheck to paycheck in a bid to survive, individuals are incentivized to invest in communities, creativity, and personal growth.

In the Bitcoin era, unproductivity and imprudence become uneconomical. The collective safety net provided by governments today becomes a distant memory. Instead, individuals take responsibility for their actions. The fiscal repercussions of lifestyle choices, like having multiple children without a means to support them or opting for an unhealthy lifestyle, become personal burdens to bear, rather than a strain on societal resources.

Products will be Built to Last

Bitcoin also encourages longevity in product manufacturing. It discourages the creation of disposable products and promotes the design of items that stand the test of time. Bitcoin holds the promise of a world where quality trumps quantity, and we return to a time when appliances were built to last, not to be replaced.

Trade Skills and Education Resurge

Because products will be required to be built to last, all the old stores that we used to wonder why they existed: shoe repair stores, vacuum repair, etc... will come back with force, and the skills needed to repair those goods will be high in demand. This will force new education and training systems back into the economy and further create communities that rely on each other to support themselves.

Homelessness and Food Insecurity become Rare

As Bitcoin reinstates money as a store of value, investments can no longer lean on inflation or government handouts to justify their viability. Projects must prove operationally profitable to be worthy of capital investment. This change will lead to a plentiful real estate market, and in an optimistic twist, potentially resolve homelessness and food shortages. Artificial government subsidies to drive prices down in the short term create instability and overproduction at scales that are unsustainable. Instead communities will be forced to build housing and grow food to meet the demands of their populaces without governemnt handouts.

Health Care becomes Affordable

Again because Bitcoin drives decentralization on a global scale, the centralized healthcare organizations will be unable to simply impose ridiculous contraints on doctors allowing them to provide holistic and sustainable health care to individuals. The entire world will be forced to adopt more traditionally eastern healing practices that focus on the health and wellbeing of the entire individual and not simply push pills down everyone's throat.

Energy Production Explodes

Bitcoin's energy-intensive proof-of-work protocol not only anchors its value in the physical world but also creates incentives for more efficient, renewable energy sources. The future could see Bitcoin mining operations driving innovation in the energy sector, reducing costs, and possibly transforming economies on a global scale. We're already seeing countries like El Savlador invest in Volcanic energy production for the mining of Bitcoin

Computational Production Explodes

As we steer our gaze towards the horizon, we discern the silhouette of another monumental shift: a surge in computational power. Bitcoin mining, requiring hefty computational resources, could propel advancements in computing technology, driving innovation and potentially catalyzing a new technological revolution.

The Global Economy Ultimately Stabilizes

In the world of Bitcoin, the safety nets erected to protect irresponsible financial decisions crumble, ensuring that the costs of poor judgment are shouldered solely by the perpetrators. This disallows the socialization of losses resulting from ill-planned ventures. The 2008 financial crisis, a painful testament to the pitfalls of our existing monetary system, becomes an improbable occurrence in a Bitcoin world.

In a world where Bitcoin becomes a dominant currency, the specter of runaway inflation becomes a relic of the past, contributing to more stable, predictable economies. Remember the marshmallow experiment in the beginning? The simple fact that Bitcoin is deflationary in nature, it incentives ( almost forces ) everyone to think long term.


The Potential of Bitcoin as a Catalyst for Global Change

We've traversed the realms of history, technology, and possibility. We've seen how Bitcoin, a child of the digital age, embodies the strengths of both hard and easy money, coupling the immutable scarcity of the former with the fluid versatility of the latter. We've glimpsed the tantalizing potential of this fusion — a world where corruption struggles to find shadowy corners, where remittances flow freely across borders, where financial sovereignty reigns, where inflation becomes a relic of the past, where energy innovation surges, and computational power amplifies.

But these visions of a Bitcoin-empowered future are not mere daydreams. They are real possibilities that lie within our collective grasp. Bitcoin has opened a new frontier, inviting us all to participate in a monetary revolution that has the potential to reshape not only our financial systems but our societies at large.

Fix the money. Fix the world.

This brings us to a crucial crossroads. The potential of Bitcoin, vast and transformative as it is, lies dormant until we, as a global society, choose to unlock it. The first step is understanding. I urge you to delve deeper into the world of money, to peel back the layers of complexity that surround it, to grasp the significance of Bitcoin in the evolution of our financial systems.

Acquire Bitcoin, not just as an asset, but as a statement of belief in a future that is more transparent, equitable, and resilient. If you have the means, consider investing in Bitcoin mining, to contribute to the security and vitality of the network, and to partake in the world-changing phenomenon that Bitcoin promises to be.

Finally, if you've enjoyed this exploration and see value in these insights, share them with others. Let's broaden the conversation, invite more voices to the table, for it is only through collective understanding and action that we can truly harness the potential of Bitcoin and turn these visions of the future into our shared reality.

We stand on the brink of a new era, teetering between what has been and what could be. Bitcoin is not just a change in money. It is an invitation to change the world. The question now is, will you accept it?

Our shared journey continues, one block at a time...